Taiwanese President Lai Ching-te on Thursday hailed the semiconductor giant TSMC’s plan to invest $100 billion (€92.7 billion) in the United States as a “historic moment” for Taiwan-US ties.

Lai said that the government was not pressured by Washington “during TSMC’s US investment process.”

China sees the self-ruled island as a breakaway province that will one day be brought back under Beijing’s control, but Taiwan boasts close ties with the US and considers it its most important security benefactor and deterrent against a Chinese invasion.

TSMC is the world’s largest chipmaker.

The Taiwanese company announced the investment plan earlier this week after US President Donald Trump threatened to impose tariffs on imported semiconductor chips.

The move would bring TSMC’s investment in the US to $165 billion, which the chip manufacturing powerhouse said was the “largest single foreign direct investment in US history.”

What prompted TSMC investment in the US?

The expansion is “driven by customer demand,” said TSMC chairman and chief executive C.C. Wei at a joint news conference with President Lai on Thursday.

“We went to Japan because of Japanese customer demand, to Germany because of German customer demand, and four years ago to the US because of American customer demand,” he said.

“Now, we are increasing our investment because the demand from US customers is extremely high,” Wei added.

In Taiwan, TSMC, whose major clients include Nvidia and Apple, plans to build 11 new production lines this year to meet demand, according to Wei.

Taiwan’s semiconductor dominance

The move stoked fears that Trump was trying to take control of TSMC’s production.

The world’s largest chipmaker has long faced demands to move factories out of Taiwan, where TSMC has its headquarters and the bulk of its chip plants, as tensions with Beijing intensify.

China has upped military pressure on Taipei in recent years.

The semiconductor industry in Taiwan has long been seen as a “silicon shield” that deters Chinese aggression. The self-ruled island makes more than half of the world’s chips.

Edited by Elizabeth Schumacher, Darko Janjevic